Muzak Maker Heads for Final Bid Deadline; Could Fetch $850 Million

The auction of Muzak distributor Mood Media Corp. is nearing its climax, with a second and final round of bidding due next week in a sale process that could fetch over $850 million including debt, a person familiar with the matter said.

The Canadian company announced in April that it was exploring strategic alternatives, including a possible sale. A deal could be reached by the end of the summer, the person said. Credit Suisse Group AG and Morgan Stanley are running the process.

A spokesman for Mood, the maker of music made famous in elevators, declined to comment.

Mood has relationships with thousands of retailers, restaurants, hotels and businesses in 40 countries, according to its website. It provides background music, scent dispersion, digital signage and other services to companies such as Krispy Kreme Doughnuts Inc. and The Body Shop International PLC.

A number of private-equity firms are circling the company, according to the person, though it’s not clear who. Mood has around $600 million in debt, which would be a large part of the payment for any potential buyers. Over the last two years, Mood has bought up a handful of competitors, including Muzak Holdings LLC, for which it paid $345 million including net debt.

For the second quarter, the small publicly traded company posted revenue of $126.3 million, up 17% from the year-earlier period. As of Wednesday, the company’s market capitalization was C$133.9 million ($129.7 million), with its stock trading at about C$0.78 cents.

Earlier this year, the company’s stock was trading at C$1.99 per share. The stock price has tumbled as Mood missed earnings and revenue expectations.